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October 9, 2009
Moneypuck
Happenings in the NHL Today

by Corey Pronman

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1. The Coyote Situation

On September 30th 2009, the bankruptcy issue for the Phoenix Coyotes franchise took a dramatic turn, as Judge Redfield T. Baum made a final verdict on the sale of the team, with the two bids being Jim Balsillie, co-CEO of Research in Motion, and the NHL. Balsillie went to great lengths to relocate a pro sports franchise, something unseen in sports since the days of Al Davis, and one can say it went beyond that since Davis actually had control of the Oakland Raiders, something Jim was seeking in the process.

Balsillie threw a dramatic number out there in his pursuit for the team, $242.5 million dollars, as opposed to the NHLís $140 million. Balsillieís bid though, as well publically known, was contingent on the Coyotes being moved to Hamilton, Ontario. This ignited a spiral of legal events, and what began as a filing for Chapter 11 bankruptcy turned into one of the greatest legal wars in professional sports history. In the process, excruciating details about the Glendale lease, Copps Coliseum, NHL territorial rights, ownership rights, the NHL constitution, NHL team finances, the relocation process and the state of the NHL as a whole were all brought to the forefront in a gruesome manner. While the NHL financial situation has always been discussed in lighter manners in the past, it has never been so clearly illuminated then it was these past few months.

The Phoenix Coyotes books were opened to the publicís eyes, and it wasn a fairly disturbing sight. Dozens of millions of dollars had been lost annually, with last seasonís Net Operating Losses totalling over $53 million dollars. Not even five million dollars worth of local TV broadcast revenue were brought in and fewer than ten thousand viewers tuned in to the Coytoes on a nightly basis. Surely, the $6.5 million allocated to Gretzkyís coaching contract didnít help either. The southwest franchise managed to collect $14 million dollars in revenue sharing as well, and still lost a massive amount of money. To illustrate the dire situation, if Phoenix hadn't paid their players, coaches, trainers or hockey personnel any salary whatsoever with the revenue sharing, they wouldíve simply broken even. Now that is what you call a terribly run fiscal entity.

These jaw-dropping numbers show a very extreme situation in the desert, which is no wonder why Reisendorf and Ice Edge Holdings backed off so quickly when things werenít aligned perfectly for them with the lease, creditors and the numerous other factors. Itís also why Gretzky was forced to leave when it became apparent that nobody would want to take on a record expense for a coaching staff.

The Coyotes are a perfect example of how not to expand. They had no corporate money, which is a semi-result of the teams they have fielded year in and year out, a terrible location in Glendale, and no product to speak of. The latter of which is the most important, as you can have the best business plan in pro sports (which obviously isn't the case here), but if you have no product you're likely heading for a disastrous ending. Especially in a new market, you canít take a product, such as hockey, that people are relatively new to, and expect them to flock to it when the Coyotes consistently put out bad product after bad product every season. The Coyotes have no commitment or history, and until given a reason to, the fans should not be expected to give blind support without a product worth watching. The Coyotes since moving to Phoenix, using PythagenPuck, have had an expected winning percentage of 45.77% over the last twelve seasons. However in their current six year playoff drought, that expected winning percentage has dropped off to a dismal 40.68%. That is a terrible product by any stretch of the imagination by NHL standards.

The aftermath of this is going to be felt by the NHL. Hamilton getting a NHL team is now more real than ever, as the NHL had to go as far as approximating Phoenix's franchise value with displays in Hamilton showing support for Balsillie and the reactions throughout Canada. While this may not be a bad thing, its unnecessary pressure and expectations from a substantial percentage of the NHL fan base. As a result of these series of events, the states of other NHL franchises have been examined up close and scrutinized, which includes the likes of Atlanta, Tampa Bay, the New York Islanders and Florida who are all facing ownership and financial issues of their own. Jim Balsillieís efforts to obtain a team opened some doors that the NHL probably wished remained firmly close.

However, the NHL did win a battle. While Baum ruled that neither bid was good enough, Balsillieís bid was denied with prejudice while the NHL can still come back and adjust their bid to better fit Moyes and Gretzky. They also prevented the floodgates from opening up by keeping Balsillie from circumventing their constitution by going through bankruptcy court. If he had succeeded, franchise values and the relocation process would have changed instantaneously in the NHL and possibly for all of the North American pro sports leagues. If Balsillie won, then potential owners could have just gone through bankruptcy court in order to plant another team in Montreal, Toronto or any other city of their choosing.

2. The NHLPA

In what was one of the most shocking and questionable moves by a players union with a dark history, on August 31st 2009, the NHLPA fired Executive Director Paul Kelly. Kelly was fired for breaching trust by reading confidential minutes and, while not the primary reason, his stance on communicating and negotiating with the league was an issue amongst some with influence. Whether or not any of these were legitimate claims is a completely different debate, but the NHLPA made a serious mistake in the process of investigating Kelly.

They hired former Ontario Chief Justice Roy McMurtry to investigate whether Kelly had committed any violations and to see if the NHLPA could pursue legal action against him. McMurty,after his investigation, told the players that Kelly had indeed violated their trust and that they were free to pursue legal action against him. There was only one issue: Roy McMurtry is a close friend of former NHLPA Executive Director Alan Eagelson. Eagelson needs no introduction as his reputation speaks for itself. The man would call himself a playerís agent, yet he would be fine with screwing over one of his clients on a contract. He would call himself the head of the PA, yet shout at players who called him that werenít on his agency clientele. Heíd say how much he admired the NHL, but would then go on to spend more time with the IIHF than the NHLPA. He stole money, committed fraud and was one of the worst union heads ever in a pro sports league.

However, it just so happened that Paul Kelly was the one who sent Alan Eagelson to jail, as Kelly prosecuted Eagelson and Alan was given an 18 month sentence for mail fraud. The only issue in all of this are Roy McMurtry's friendship ties to Alan Eagelson. Even if the evidence against Kelly was true, and the course of action correct, the fact that a man who may possess incredible bias against Kelly places a huge cloud of suspicion over the whole process in whatís already a questionable firing by the NHLPA.

3. NHL Premiere Games

For the last three seasons, the NHL has gone overseas at the start of the season, to promote the NHL in Europe. In 07-08, the Kings and Ducks played a doubleheader in London. In 08-09, the Senators and Penguins played two games in Stockholm, Sweden while the Rangers and Lightning played each other twice in the Czech Republic city of Prague. This season, the Blues and Red Wings played a pair in Stockholm while the Panthers and Blackhawks opened in Helsinki, Finland.

While the exposure is good for the NHL, and it is definitely an interesting experience, one has to wonder about the effects it has on the clubs, as they have to face jet lag and several days off after returning. Taking the results of the teams that played in those games from 07-08 to 08-09, and using their records and goal differentials in the first game, the first three games, the first five games after returning, and their record and differential the rest of the way, we will try to see if there is anything to note from these results.

Take note that my team record system is different; I record OTL as a pure L and any shootout verdict as a tie. Therefore the record could be read as W-L-Tie with W being Regulation wins + Overtime wins, L being Regulation losses + Overtime losses, and a Tie representing all games going to a shootout. The purpose of this is to:

  • Track teams like they are in the playoffs, where there are no shootouts and no credit for overtime losses.
  • Give exactly two points away per game, thus making a .500 team get exactly a point per game and making it easier to understand the hockey performance levels of teams.

I call it True Standings.

Los Angeles Kings:

First game after:  	 3-5 L
3 games after:		 0-3 		10 GF 18 GA
5 games after:		 0-4-1 		14 GF 25 GA

Anaheim Ducks:

First game after:  	 2-2 Tie
3 games after: 		 0-2-1 		 6 GF 11 GA
5 games after: 		 1-3-1 		 8 GF 14 GA

Ottawa Senators:

First game after: 	 2-3 L
3 games after:		 1-2 		10 GF 10 GA
5 games after: 		 1-4 		14 GF 17 GA

Pittsburgh Penguins:

First game after:  	 1-2 L
3 games after: 		 1-2 	  	 7 GF  8 GA
5 games after:		 2-2-1 		12 GF 10 GA

New York Rangers: 
First game after:  	 4-2 W
3 games after: 		 3-0 		12 GF  6 GA
5 games after: 		 4-0-1 		13 GF  9 GA

Tampa Bay Lightning:

First game after: 	 3-4 L
3 games after:		 0-2-1 		 6 GF  8 GA
5 games after:		 1-3-1 	  	 9 GF 13 GA

So here is a total of the six teams:

First game after: 	 1-4-1 		15 GF 18 GA
3 games after:		 5-11-2     	51 GF 61 GA
5 games after: 		 9-16-5 	70 GF 88 GA

Here is the points percentages (under the True Standings system) along with a Pythagorean expected winning %:

First game after: 	.25 points %, 	40.98 expected winning %
3 games after:  	.33 points % 	41.14 expected winning %
5 games after: 		.38 points % 	38.75 expected winning %

Here are the same stats for those particular teams from the 5th game after returning onwards:

.45 points %, 46.67 expected winning %

The difference is relatively small, which raises the issue of sample size, but whether or not the sample may mislead the results, the main point is this: teams have played worse when they have come back from Europe as opposed to their following year, when they have played over the course of the year without a long distance trip. A large part of this may be due to rest and jet lag which could make the any player 'go cold' after not playing for several days. Even if this is due to a sample size, if going overseas could result in a one or two point loss in the standings on average, then thatís a significant debit to a teamís playoff chase. Especially to this yearís participants like the Panthers and Blues, who are most likely going to be fringe playoff teams.

Corey Pronman is a contributor to Puck Prospectus and runs the statistical hockey site The Hock Project. You can contact him at CPronman@fau.edu.

Corey Pronman is an author of Hockey Prospectus. You can contact Corey by clicking here or click here to see Corey's other articles.

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